Tesco share price: Banking unit launches five-year mortgage fix

Tesco’s (LON:TSCO) banking division has launched two five-year fixed rate remortgage products, the company has said. The move comes as the challenger

Tesco’s (LON:TSCO) banking division has launched two five-year fixed rate remortgage products, the company has said. The move comes as the challenger bank looks to make it easier for customers who want to remortgage their home.

Tesco’s share price has fallen into the red in today’s session, having shed 1.37 percent to 176.40p, largely in line with the selloff in the broader London market, which has seen the benchmark FTSE 100 index give up 0.94 percent to 7,318.86 points so far today. The group’s shares have added more than 10 percent to their value over the past year, but have given up some 14 percent in the year-to-date.

Tesco Bank announced in a statement yesterday that it had introduced two five-year fixed rate remortgage products, and had further reduced the rates across a selection of its two-, three- and five-year fixed rate house purchase and remortgage products. All products will move onto the Tesco Bank Standard Variable Rate, which currently stands at 3.89 percent, at the end of the initial fixed rate period.

“With more customers looking to take longer-term fixed rate mortgages, I am delighted that we can offer these market-leading rates,” David McCreadie, Managing Director at Tesco Bank, commented in the statement. FT Adviser meanwhile quoted Matthew Watson, mortgage adviser at The Mortgage Shop in Kent, as pointing out that he believed that the five-year deals offered a good rate for customers wanting to fix. He, however, noted that Tesco mortgages were not available through all intermediary networks.

The news comes after Tesco revealed in its latest trading update that sales at its banking unit had climbed by 4.8 percent during the first quarter of its financial year, supported by a significant increase in secured lending following the launch into the intermediary mortgage broker market in April last year.